Harris Corp

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HRS : NYSE : Technology
$91.43 up 1.30 | 1.40%
Today's Range: 89.75 - 91.61
Avg. Daily Volume: 717,900
09/27/16 - 2:04 PM ET

Financial Analysis


HARRIS CORP's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. HARRIS CORP has weak liquidity. Currently, the Quick Ratio is 0.76 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 10.03% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)1904.01534.7
EBITDA ($mil)400.0299.5
EBIT ($mil)308.0253.7
Net Income ($mil)160.0-56.3


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)501.0748.0
Total Assets ($mil)11996.013129.0
Total Debt ($mil)4517.05216.0
Equity ($mil)3056.03397.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin35.5636.25
EBITDA Margin21.019.51
Operating Margin16.1816.53
Sales Turnover0.620.39
Return on Assets2.72.54
Return on Equity11.289.83
Debt Q4 FY16 Q4 FY15
Current Ratio1.331.54
Debt/Capital0.60.61
Interest Expense44.032.5
Interest Coverage7.07.81


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)124.64123.68
Div / share0.50.47
EPS1.29-0.51
Book value / share24.5227.47
Institutional Own % n/a n/a
Avg Daily Volume733089.0986296.0

Valuation


BUY. HARRIS CORP's P/E ratio indicates a premium compared to an average of 27.29 for the Communications Equipment industry and a premium compared to the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 3.70 indicates a premium versus the S&P 500 average of 2.82 and a premium versus the industry average of 3.37. The price-to-sales ratio is below the S&P 500 average and is well below the industry average, indicating a discount. After reviewing these and other key valuation criteria, HARRIS CORP proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HRS 33.14 Peers 27.29   HRS 12.25 Peers 13.71

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

HRS is trading at a premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HRS is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HRS 14.46 Peers 18.80   HRS 0.30 Peers 1.05

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HRS is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HRS trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HRS 3.70 Peers 3.37   HRS -14.11 Peers 65.68

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HRS is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HRS is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HRS 1.52 Peers 3.20   HRS 46.90 Peers 12.32

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HRS is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

HRS has a sales growth rate that significantly exceeds its peers.

 

 

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